Account Performance
Account Return % (XIRR) and MoM Calculations
- The purpose of these calculations is to evaluate account performance including the dampening impact of cash holdings on returns.
- The approach we take to calculate Acc XIRR and Acc MoM is to augment the cash flows from all assets within the account with entries that represent the average daily cash balance in the account during the period.
- The start date and end date that are used to scope the term during which the measurement of the average daily cash balance is calculated for each mode follows.
| Mode | Start Date | End Date |
|---|---|---|
| History | Date of the first transaction in the account | Date of the last closing transaction. |
| Active | Date of the first transaction in the account | Today's date |
| Lifetime | Date of the first transaction in the account | Today's date |
| Active Projected | Date of the first transaction in the account | Projected date |
| Lifetime Projected | Date of the first transaction in the account | Projected date |
- The reason this methodology is employed for performance measurement for a specific Mode rather than cumulating cash flows in and out of the account is because it is infeasible to to assign cash movements discretely to either History Mode or Active Mode.
- An example of this infeasibility may be seen where an investor puts a lump sum of cash in an account and then over time invests it in equities within the account while also over time transferring funds out of the account to fund investments in other accounts.
- While the method employed double counts some cash holdings in History Mode and Active Mode, the approach does provide a conservative, indicative performance evaluation of the dilutive effects of cash holdings within the scope of each of those modes.